A channel for distribution is defined as the agencies and strategies an organization uses to support its product marketing and increase their sales. An important determinant of the structure of a distribution channel is the marketing functions carried out by the particular organization. It should prepare a plan of the expected sales volume and profit.
The health care sector has its products and services which need to be distributed through various channels. Some of these products include medicine, equipment like machine for cancer patients. Services include attending to patients, outpatient and inpatients. The distribution channel used determines the speed of delivering the products or services and the cost of distribution.
There are various types of distribution channels characterized by use of intermediaries like retailers, agents, wholesalers. The channels are also characterized by Location of outlets in different parts of the region or country, and personal selling by the health care industries (Gorchels et al, 2004).
As Gorchels et al (2004) further note, there are various factors that determine the most appropriate channel for an organization to distribute its products.
First is the profit and sales expected. The organization should choose a channel that yields the highest volume of sales which in turn gives high profits. For instance, the use of intermediaries like agents and retailers can reduce profits because they also sell at a price that they get profits. Use of a long chain of distribution leads to reduced profits. However, the volume of sales is increased because more products are sold. Therefore, a balance should be found.
Convenience to the consumer is also important. The organization should consider the target consumer, for instance malaria or cancer patients. The targeted customers should be able to access the products and services easily.
Finally, the organization should also consider competition. An organization is expected to look at its direct competitors in the market and the type of channel that they use. Is the channel effective enough? This helps them to know the one to use so that they compete well and end up selling more of their products and services.
In conclusion, distribution is very important. When distributing commodities, organization should look at the types of distribution channels available. The organization should further take into consideration all the necessary factors before deciding on which channel to use.
Gorchels, R., Marien, E., & West, C. (2004). The Manager’s Guide to Distribution Channels. New York: McGraw-Hill.